Women who work in the charity sector have a 29% lower pension pot on average than their male colleagues, new analysis has showed.
Research released yesterday by financial services group Legal & General (L&G) found that on average women earn £12,000 in retirement income compared with £26,000 for men across the combined charity, healthcare, pharmaceuticals, senior care and leisure, travel & tourism sectors.
The charity sector's 29% gender pensions gap was lower than the 59% found in the healthcare industry but wider than the 13% recorded in courier services.
Reasons for gender pensions gap
L&G analysed data of about 4.5 million of its contribution members as of 1 April but did not look at any other pension schemes they might have elsewhere.
Across all sectors, it found the initial gap (16-17%) in pension pot size remained the same until women and men reached their 30s but nearly doubled to 31% by the time they were in their 40s. It then rose to 51% for over-50s and 55% for those approaching retirement.
L&G said that some of the reasons behind the gender pensions gap can be attributed to women holding fewer senior positions and receiving lower wages and those taking a career break because of caring responsibilities.
Another potential factor, L&G suggested, could be that a lower proportion of women were confident handling their pensions compared to men.
Over a quarter (28%) of women said that they “had confidence in their ability to make decisions about their pension” compared with just under half (48%) of men, it found.
L&G: More needs to be done to tackle the issue
Katharine Photiou, commercial director of workplace savings at L&G, said there are not enough discussions on the gender pensions gap despite “many women” experiencing it.
“This shows more needs to be done to boost engagement with pensions, particularly with those who feel less confident, and who may need help on where to start when it comes to making financial decisions,” she said.
“Millions of people would benefit from a wider range of support services to make more informed decisions about their savings and investments. But this support needs to be personalised to achieve any real shift, and this is where government and industry need to work together. Pensions can seem complicated but they're just a regular savings plan with some tax perks. We need to demystify pensions and get back to basics.”
L&G offered some tips on what individuals can do to help reduce the gender pensions gap, including:
• Contribute as much as you can to your pension - and start early.
• Check the charges on your historic pension pots. See if consolidating your pots will bring them down.
• Talk through your pension planning with your partner. Make sure you know about each other’s saving plans, contribution limits and that you are both on the same page.
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